in the supreme court of belze, a. d. 2012 claim no. 531 (sandra...
TRANSCRIPT
![Page 1: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/1.jpg)
- 1 -
IN THE SUPREME COURT OF BELZE, A. D. 2012
CLAIM NO. 531
(SANDRA BERGQUIST CLAIMANTS
(PROPRIETORS OF STRATA PLAN NO. 22 LTD.
BETWEEN (AND
(MICHAEL SLUSSER DEFENDANT
-----
BEFORE THE HONOURABLE MADAM JUSTICE MICHELLE ARANA
Mr. Said Musa, S. C., of Musa and Balderamos for the Claimants
Ms. Sharon Pitts of Pitts and Elrington for the Defendant
-----
J U D G M E N T
1. This is a claim for the sum of $139,800 BZ as arrears of maintenance fees
that the Claimants allege were agreed to be paid at the rate of $300 per
month per unit from November 1st, 2005 to September 1st, 2012. The
Claimants also seek $3000 as fixed costs and $225 as court and process fees
together with interest from the due date at the rate agreed at 12% per
annum.
![Page 2: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/2.jpg)
- 2 -
2. The Defendant has counterclaimed as against the Claimants for payment of
the sum of $858,337.90 BZ as past maintenance fees he alleges are due
under bylaws dated October 10th, 2003.
The Facts
3. The following facts are those agreed to between the parties in their Agreed
Statement of Facts and Issues dated 26th March, 2014:
i. The Claimants and Defendants are the owners of the Perla Escondida
Condominiums set out in Strata Plan #22 situated as Block 7 Parcel ID 42-
433 in San Pedro Ambergris Caye, Belize District.
ii. The Strata Plan #22 was registered by Jack Embry of Grantwell Ltd., the
builders of the said condos, on the 11th February, 2003.
iii. The Defendant on or about the 27th November, 2003 purchased five of
the condo units from Jack Embry. He then formed a company - Perla
Escondida Condominium Ltd. - with him and his wife as shareholders and
with the apparent agreement of Jack Embry assumed control and
management of the condo complex.
iv. The Claimants contend that as part of the by-laws it was agreed that all
proprietors of the condo units would contribute a monthly maintenance
fee of $300 per unit. The Defendant does not agree on this point.
v. Between November 2003 and November 2005 the Defendant had control
of the Administration of the condo complex in Strata Plan #22 and
collected maintenance fees from all the proprietors.
vi. During this period there was growing dissatisfaction with the
administration and maintenance of the condo units and the common
area.
vii. The Claimants contend that at a general meeting of the proprietors held
on or about the 12th November, 2005 a vote was taken to appoint a new
executive committee of the proprietors to be in charge of the
![Page 3: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/3.jpg)
- 3 -
administration and management of the condo complex. Seventeen of the
twenty two unit holders voted to oust the Defendant and his company
from the control and management of the condo complex. The Defendant
however maintains that there was no proper meeting.
viii. Since that time (November 2005) the Defendant has refused to pay any
maintenance fees for any of his units and there have been a series of law
suits in his attempts to gain back control without success, according to
the Claimants. The Defendant, however, denies this and says that there
have been no prior law suits in the parties’ attempt to resolve this
matter.
ix. Sometime in the year 2010, the Defendant secured title from Jack Embry
for an additional four units. He has still refused to pay maintenance fees
for any of his now nine units.
x. The Claimants claim is for arrears of maintenance fees owed by the
Defendant since November 2005 to the present time.
xi. The Defendants counter claim is for maintenance fees and loss of profits
on the basis that he is still the legitimate person in charge of the condos
complex comprised in Strata Plan #22.
The Issues
4. Are the Claimants entitled to the sums claimed as unpaid maintenance
fees, or is the Defendant entitled to the sums he claims as maintenance
fees/loss of profits?
The Evidence
5. At trial, the Claimants called two witnesses and the Defendant called one.
Mrs. Sandra Bergquist testified in her witness statement that she is a
Chartered Accountant and the owner of Unit Number 21 of the Perla
![Page 4: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/4.jpg)
- 4 -
Escondida Condominiums. She stated that at the time of purchase of their
respective condo units all proprietors including the Defendant Michael
Slusser agreed to pay maintenance fees of $300 per month for each unit. At
that time Mr. Slusser owned 5 of the 21 units. She said that these
maintenance fees would cover monthly costs of items such as cost of
security guard, cost of grounds keeper, cost of maintenance staff to control
the reasonable conduct and use of the common areas, general
maintenance including periodic painting and repair work on the exterior of
the buildings for normal wear and tear, paying cable bills and water bills for
each unit. The witness said that in August 2004 Mr. Slusser distributed an
Owners Quarterly Report which showed that all units has been changed to
individual water meters and owners were informed that they would have to
pay their own water and cable bills. She said that this action by Mr. Slusser
was arbitrary and unilateral and taken without any meeting or consultation
with the other owners. She also stated that there was never any security
service or grounds keeping staff provided by the Defendant’s Management
Company. In September 2004, Mr. Slusser unilaterally raised the
maintenance fees to US $165 per month despite the fact that the services
covenanted were terminated. As a consequence, a general meeting was
![Page 5: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/5.jpg)
- 5 -
convened on or about the 14th November, 2005 of all the proprietors of
Perla Escondida and all those in attendance whether in person or by proxy.
The minutes of the meeting are attached to the witness statement. At that
meeting all the owners present voted to establish their own Home Owners
Association to manage the condominiums of Strata No. 22. Attorney
Michael Peyrefitte was invited and was present and advised the owners
how to proceed. The owners also voted to nominate three new
representatives of the Proprietors Strata Plan No. 22. The nominees were
Chuck Merritt, Billy Doerr and Sandra Bergquist. It was further agreed that
the maintenance fee for each unit would remain at $300 BZ or $150 US per
month. On November 4th, 2009 the Home Owners Association was duly
incorporated as the Proprietors of Strata Plan No. 22 with Don Richardson
and Sandra Bergquist as Directors. Since November 2005 to the present,
Mr. Slusser has defaulted in the payment of his maintenance fee for any of
his units. In 2010 he secured title to an additional four units bringing his
total to nine units. The total owed by Mr. Slusser for maintenance fees are
$139,800 for the period January 11th, 2005 to January 10th, 2012.
6. Mrs. Bergquist was cross examined by Ms. Pitts on behalf of the Defendant.
It was put to Mrs. Bergquist that there was no unanimous vote to create
![Page 6: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/6.jpg)
- 6 -
the Home Owners Association at the meeting of proprietors on November
14th, 2005. The witness said yes and that all homeowners were notified
including Mr. Slusser and his wife Teresa Clegman. Mr. Slusser and his wife
did not attend. Every other homeowner was present or voted by proxy or
by telephone. It was clarified by the court that what the witness meant is
that Mr. Slusser and his wife did not attend the meeting, but all the other
members who participated in the meeting voted unanimously for the
establishment of the Home Owners Association. Mr. Slusser did not attend
and did not vote. Mrs. Bergquist was asked whether she registered any
amendment to the CC & Rs (by-laws) in Belmopan. She said she believed
they were registered by Michael Peyerfitte or Elson Kaseke. She did not
personally register the by-laws so she cannot say definitively that they were
registered, but she believes one of those attorneys did. It was put to her
that the company Strata Plan No. 22 was registered under the Companies
Act and not under the strata lot. She agreed and said as far as she knew
everything was registered under Strata Plan No. 22. Her personal title to
her unit would come from the Land Registry and it was issued by
Grantwell Ltd. (a company owned by the developer Jack Embry). She said
she searched the Land Registry in Belmopan personally prior to purchasing
![Page 7: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/7.jpg)
- 7 -
her unit. In answer to the question whether she was aware that there were
restricted covenant conditions and restrictions on her unit at the time she
bought it, the witness said she didn’t ask about covenants. She was there to
find out if the title was clear or not. It was put to her that the CC & Rs were
registered at the time of her purchase and provided for the management
and administration of all the units. Mrs. Bergquist said that she got a copy
of the CC & Rs a couple months after she bought her unit and upon reading
them saw what the management was supposed to be providing to the
proprietors. Mr. Jack Embry, the developer who built the units, gave her a
copy. The witness was asked whether the CC & Rs made certain provisions
for its amendment. She agreed. Mrs. Berguist was asked if Article 12(5) of
the CC & Rs required that amendment be done by “an instrument approved
in writing by not less than 2/3 of the owners together with the Declarant
and/or Management Company”. She agreed and said that they did have 2/3
votes at the meeting since 17 of the 21 owners agreed. She was asked if she
was aware of the additional requirement that there also had to be an
agreement in writing by the Management Company as the Declarant after
the meeting. The witness said she knew of the requirement and said that
the Defendant refused to participate in the meeting. She agreed with
![Page 8: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/8.jpg)
- 8 -
counsel’s suggestion that the owners did not get permission from Michael
Slusser to register the company, but she explained that they did not feel
they needed his authority since they had 2/3 votes and he had already
breached his own CC & Rs. It was put to the witness that she was aware
that the amendments sought could not be registered at the Land Registry,
so as a unit holder she sought to have a company registered under the
Companies Act to get around the provisions of the Strata Title Registration
Law. Mrs. Bergquist said that she was not trying to get around anything.
She simply wanted her property maintained in proper order. The
Management Company was not following their own CC & Rs.
7. The second witness for the Claimant was Mr. Anthony Lopez who said he
was the caretaker for Perla Escondida Condominiums and that he has been
so employed for and on behalf of the Home Owners Association
incorporated as Proprietors of Strata Plan No. 22 from January 17th, 2007
up to the present. He was not cross examined.
8. The sole witness for the Defence was the Defendant Michael Slusser.
Mr. Slusser gave his evidence via video conferencing as he was unable to
travel to Belize for the trial. He testified by two witness statements dated
![Page 9: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/9.jpg)
- 9 -
August 2nd, 2013 and March 7th, 2014 respectively. Mr. Slusser stated that
he is a US Resident and property owner on Coconut Drive, San Pedro
Ambergris Caye. He said that there are legally registered and binding by-
laws of 10th October, 2003 and that under those by-laws the Defendant is
the only person that has a legal right to manage Perla Escondida
Condominiums.
He said that those by-laws were unanimously agreed upon by all owners at
that time and registered with the Lands Department. He alleges that the
Claimants have fabricated another set of by-laws and have presented them
to the court. Mr. Slusser points to Article 12(5) of the by-laws and
emphasizes the requirement of approval in writing and 2/3 owners votes.
He states that he is the Declarant and Management Company referred to in
those by-laws and that he has never agreed to any changes to the
registered by-laws. He said that he purchased his properties under the
terms of those same by-laws and never agreed to nor signed any
documents that would bind him to pay any sums to anybody. Mr. Slusser
also said that a small group of owners (including Mrs. Sandra Bergquist and
a few others) disagreed with the Management Company and disregarded
the registered by-laws and set out on their own to form their own company
![Page 10: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/10.jpg)
- 10 -
with their own set of rules. They are attempting to force their will on all
other owners, without any legal basis. He also says that the new by-laws
produced by the Claimants have no validity over him and his properties. He
purchased his properties years before the Claimants produced these new
by-laws. He never agreed in any form to the Claimant’s by-laws. He also
asks the Claimant to produce a date as to when their by-laws were
fabricated and the instrument in writing wherein all owners unanimously
agreed, and produce the registration stamp and date of the Lands
Department where the instrument would have been registered. Mr. Slusser
states that he is the lawful owner of the names Perla Escondida and Perla
Escondida Condominiums as registered with the Corporations Department.
He claims that all new owners were given a copy of the by-laws since 25th
November, 2003, the date of the Contract of Sale and Management
Agreement by his Management Company, and that all those sales
agreements/contracts between new purchasers and the vendor Grantwell
Ltd., also known as Jack Embry, contain the following provision:
“Purchaser(s) agree by the signing of this Contract Agreement to abide by
all Covenants, Conditions, and Restrictions of PERLA ESCONDIDA
![Page 11: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/11.jpg)
- 11 -
CONDOMINIUMS, and will sign said CC & Rs and have on record that they
have read and agree with all the CC & Rs.”
Finally, Mr. Slusser states that he was given a copy of those CC & Rs by
Mr. Embry on or about July 2003 and that those by-laws have been
registered with the Government of Belize on October 10th, 2003. He also
mentions that on or about June 2003 he met one Ms. Welch, Head of the
Belize Lands Department, at the Lands Registry and had a conversation with
her, and that Ms. Welch assured him that those by-laws were registered
saying: “The registered by-laws are not set out exactly word for word as
they are in the Strata Law, but they contain all the elements of the Strata
law. They follow the law and therefore are legal and duly registered. I see
no problem with them.”
9. Mr. Slusser was cross examined by Mr. Musa, SC, on behalf of the
Claimants. He was asked who made the by-laws that he referred to in his
witness statement. He replied Jack Embry and that the name of the
institution that created the by-laws was Grantwell Ltd. He was asked
whether the by-laws and CC & Rs are the same thing and the witness said
yes. He also agreed with Learned Counsel’s suggestion that the document
![Page 12: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/12.jpg)
- 12 -
tendered on his behalf in evidence was entitled Perla Escondida
Condominiums Ltd. and not Grantwell Ltd. Mr. Slusser also explained that,
“By Contract of Sale and Management Agreement dated 25th day of
November, 2003 between Grantwell Ltd. and Perla Escondida Ltd., Perla
Escondida became the Declarant as provided for in section 4 of the by-laws
or CCRs. It refers to its successors and assigns Grantwell Ltd. assigned Perla
Escondida as the Declarant and Management Company under that Contract
of Sale and Management Agreement of November 25th, 2003.”
It was put to Mr. Slusser that the CC & Rs document on which he is relying
is not registered. His answer was, “Okay. I understand what you are
saying”. It was also put to Mr. Slusser that when one looks at the title of
the property in the Lands Registry it is showing that that title to Strata Plan
No. 22 is registered in the name of the Proprietors of Strata Plan No. 22.
The witness was shown the registered title extracted from the Land
Registry on January 20th, 2014. Counsel read the extract to the witness as
follows: “11th February, 2003 Restriction: No dealings in this land unless by
order of the Court or Registrar”. And under Encumbrances it says,
“Registers in respect of strata lots have been opened; that no encumbrances
or restrictions are noted on the title”. After reading the extract to him, it
![Page 13: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/13.jpg)
- 13 -
was put to Mr. Slusser again that the by-laws on which he is relying were
never registered. The witness replied that he understands what Counsel is
saying but as far as he knows the by-laws were registered. Counsel then
said the extract shows that the bylaws of his own client were also not
registered and on that basis, the only bylaws that can affect this case are
those bylaws that are set out in the First Schedule and the Second Schedule
to the strata law. Mr. Slusser disagreed. It was later put to him that in 2005
he owned 4 condos. He said 5. He agreed that he took over management of
the condos and proprietors like Don Richardson started paying
maintenance fees to him. He also agreed that he was charging $300 BZ per
month. He was asked if by late 2005 there was a lot of discontent with his
management of the condominium complex. He said he did not know. Many
suggestions were put to him that the complex was neglected and
abandoned, pool was not functional and the boat pier was in a state of
disrepair. He disagreed and said that he gave Jack Embry one million dollars
US for the properties and he would not let one million dollars in disrepair.
Mr. Slusser said that he never met with the proprietors to discuss their
dissatisfaction with his services as manager. He conceded that he did
receive emails complaining about construction defects, sewer gas smell,
![Page 14: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/14.jpg)
- 14 -
building structure and he relayed the problems to Jack Embry who fixed
them. He also agreed that he has never paid the proprietors one cent since
they took over management of the complex in 2005. In his view, he still
owns the maintenance company and he sends out billing to the other
owners. It was put to him that in his fight with Jack Embry since 2003 he
has now extended that fight to the other proprietors and they are now
paying the brunt. Mr. Slusser said that is not true.
Upon being re-examined by Ms. Pitts, Mr. Slusser clarified that his position
is that he not only bought physical condominium units from Grantwell Ltd.
and Jack Embry, he also bought the rights under the CC & Rs. He said that
he never received any notice of the proprietors’ meeting in 2005 where the
by-laws were produced and he has never seen those by-laws.
Legal Submissions
10. Mr. Musa, SC, submits that the contention of the Defendant that there are
legally registered by-laws of 10th October, 2003 and that under those by-
laws the Defendant or his company is the only person with a legal right to
manage the Perla Escondida Condominiums, is devoid of any supporting
evidence. When Mr. Slusser was shown a copy of the Land Register report
![Page 15: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/15.jpg)
- 15 -
of Plan No. 22 in which no restrictions or encumbrances were noted, his
response was hearsay; that he was told by a Ms. Welch at Land Registry in
Belmopan that his by-laws were registered. Mr. Musa, SC, states that the
simple fact is that no by-laws made by the corporation or by any proprietor
of Strata Plan No. 22 were ever registered as the law required in Section
15(5) of the Act. The only binding by-laws are therefore those in the First
and Second Schedule to the Act. Mr. Musa, SC, also submits that the
Defendant’s attempt to maintain management and control of the
Corporation by the device of an agreement between him and the builder
Jack Embry flies in the face of the doctrine of privity of contract. (Chitty on
Contracts Vol 1 28th ed at para. 19-003). Counsel then refers to the law
governing strata lots as set out in Chapter 9 of the Laws of Belize. He argues
that the law is based on the principle of democratic governance. No one
proprietor (even if he owns several lots) is allowed to become a corporation
sole with powers of control in perpetuity unless by a unanimous resolution
of all the proprietors who by virtue of Section 5 are a Body Corporate.
Mr. Musa, SC, also submits that by Clause 2 of the First Schedule to the Act
(the By-Laws), “Every corporation shall control, manage, and administer the
common property for the benefit of all proprietors”.
![Page 16: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/16.jpg)
- 16 -
Clauses 4-12 of the First Schedule provide for the holding of general
meetings of the Corporation and Clauses 13-22 make provisions for the
election of an Executive Committee of not less than three members to
exercise the powers and perform the duties of the Corporation. Clause 10
of the First Schedule provides that one half of the persons entitled to vote
at any general meeting whether present or by proxy shall constitute a
quorum. Clause 24 provides that at any general meeting, a resolution by
the vote of the meeting shall be decided by a show of hands unless a poll is
demanded. There is no requirement for any unanimity to vote for a change
of management. Learned Senior Counsel therefore submits that at the
meeting of November 12th, 2005, there was clearly a quorum. The
appointment of a new Executive Committee to manage the affairs of the
Corporation, voted on by an overwhelming majority of proprietors, was
valid and effectual.
In conclusion, Mr. Musa, SC, submits that the Claimants have been
managing the Corporation since 2005 and that it is beyond dispute that the
Defendant has not paid any maintenance fees since he lost control of
management. Between November 2005 and October 2010 the Defendant
owed fees for five units. He later acquired four more units and now owes
![Page 17: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/17.jpg)
- 17 -
for nine units. The Claimants are therefore entitled to judgment for the
amounts claimed together with interest and costs.
11. Ms. Pitts argues that the Defendant’s evidence shows that he first
purchased certain condominiums and management rights years before the
Claimants’ purported by-laws, under legal contract for property rights to
strata units land and exclusive management rights over all other condos.
The Defendant testified that he never got any invitation or notice to attend
any meeting in San Pedro in 2005 and he has not seen any by-laws from
that meeting. The Defendant maintains his rights to manage and so his
right to collect fees.
Ms. Pitts further argues that the purported meeting of 2005 (absent
evidence of notice to Defendant) could not abrogate or affect negatively his
property rights, neither as to his realty or personal contractual rights, and is
of no legal effect against him. She submits that to find otherwise would be
tantamount to wrongful deprivation of property which is unconstitutional,
as the Belize Constitution Section 5 guarantees and guards against wrongful
deprivation of property. She submits that the purported meeting of 2005
was at most an attempt to hijack the management rights and avoid
![Page 18: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/18.jpg)
- 18 -
payment of fees and to act without any or any proper regard for the Strata
Law or the Defendant. Ms. Pitts argues that there was no evidence of
written notice of the meeting to the Defendant, nor was there any evidence
of minutes thereof. Most critically there is no evidence of any amendment
or document showing registration under the Strata Titles Registration Act
or Registered Land of any purported amendment or establishment of
Executive Committee by Claimants at all. She says there was unanimity of
ownership and decision making when Jack Embry/Grantwell Ltd. who was
the unanimous owner of all condominium units at the time that a contract
was entered into with the Defendant for exclusive management of the
units. This contract antedated the Claimants who subsequently purchased
condominium units and admitted signing an agreement to pay
maintenance fees under the pre-existing binding legal entitlement of the
Defendant and or his company Perla Escondida Ltd., as Assignee Successor
under Contract of Sales and Management Agreement of November 25th,
2003. She cites the Strata Registration Act in Section II(2) which states that
by-laws shall include by-laws set forth in the First Schedule which shall not
be varied except for unanimous resolution and that the by-laws set forth in
the Second Schedule may be amended or varied by the Corporation.
![Page 19: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/19.jpg)
- 19 -
Ms. Pitts also cites Section 15 of the Strata Registration Act which states
that no amendment or variation of any bylaw shall have effect until the
relevant corporation has lodged with the Registrar a notification thereof in
such form as may be prescribed and until the Registrar notifies the
corporation that he has made reference thereto on the relevant registered
Strata Plan. She submits therefore that the Claimants are not entitled to
collect the fees they seek, that the Defendant and his company are the only
valid Management Company, and that it is the Claimants who owe fees to
the Defendant for services provided by him.
Ruling
12. I thank both Counsel for the legal submissions made on behalf of the
Claimants and the Defendant in this matter. It is clear to me from the
evidence that there is no set of by-laws that have been registered either by
the Claimant or by the Defendant as required by the Strata Registration Act
Section 15.
“15(1) Subject to the provisions of this Act, the control, management,
administration, use and enjoyment of the strata lots and the common
property contained in every registered strata plan shall be regulated by
by-laws.
![Page 20: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/20.jpg)
- 20 -
(2) The by-laws shall include -
(a) the by-laws set forth in the First Schedule, which shall not be
amended or varied except by unanimous resolution;
(b) the by-laws set forth in the Second Schedule, which may be
amended or varied by the Corporation.
(3) Until by-laws are made by a Corporation in that behalf, the bylaws set
forth in the First Schedule and the Second Schedule shall, as and from the
registration of a strata plan, be in force for all purposes in relation to the
relevant parcel and the strata lots and common property therein.
(4) No by-law shall operate to prohibit or restrict the devolution of strata
lots or any dealing therewith or to destroy or modify any easement
implied or created by this Act.
(5) No amendment or variation of any by-law shall have effect until the
relevant Corporation has lodged with the Registrar a notification thereof
in such form as may be prescribed and until the Registrar notifies the
Corporation that he has made reference thereto on the relevant
registered strata plan.
(6) Every Corporation shall, on the application of a proprietor or any
person authorized in writing by him, make available for inspection the by-
laws for the time being in force.
(7) By-laws for the time being in force shall bind every Corporation and
the proprietors to the same extent as if such by-laws had respectively
been signed and sealed by such Corporation and each proprietor and
contained convenants on the part of such Corporation with each
proprietor and on the part of each proprietor with every other proprietor
and with such corporation to observe and perform all the provisions of the
by-laws.”
Section 15(3) clearly spells out what should occur in the meantime the
Corporation registers its own bylaws; that is, until that event occurs, then
the bylaws set forth in the First Schedule and the Second Schedule shall be
![Page 21: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/21.jpg)
- 21 -
in force. There has been no evidence that the CC & Rs relied on by
Mr. Slusser were ever registered. There is also no evidence that the bylaws
produced by the Claimants were ever registered. As Mr. Musa, SC, rightly
submitted, the report of the Land Register shows that the Strata Plan No.
22 is blank, with no encumbrances, covenants or restrictions on the title. In
light of this, the only binding by-laws on the Strata Plan are therefore those
provided in the Act itself in the First Schedule and the Second Schedule.
Looking at the by-laws as expressed in the First Schedule under the rubric
General Meetings, Section 7, 8 , 9 and 10 set out the manner in which the
proprietors are to conduct their meetings.
“7. Every Corporation may, whenever it thinks fit and shall upon a
requisition in writing made by proprietors entitled to twenty-five per
centum of the total unit entitlement of the strata lots, convene an
extraordinary general meeting.
8. Seven days notice of every general meeting specifying the place, the
date and the hour of the meeting and, in case of special business, the
general nature of such business, shall be given to all proprietors and
registered first chargees who have notified their interest to the
Corporation, but accidental omission to give such notice to any proprietor
or to any registered first charge of non-receipt of such notice shall not
invalidate any proceedings at any such meeting.
9. All business shall be deemed special that is transacted at an annual or
extraordinary general meeting, with the exception of the consideration of
accounts.
![Page 22: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/22.jpg)
- 22 -
10. Save as is in these by-laws otherwise provided, no business shall be
transacted at any general meeting unless a quorum of persons entitled to
vote is present at the time when the meeting proceeds to business. One
half of the persons entitled to vote present in person or by proxy shall
constitute a quorum.”
I note in particular that Section 8 provides expressly that accidental
omission to give notice to any proprietor shall not invalidate the
proceedings at any such meeting. I believe on a balance of probabilities
the evidence of Ms. Bergquist that Mr. Slusser was in fact given notice of
the meeting but he chose not to attend. Given the high state of
discontent of the other proprietors with Mr. Slusser’s management
services, (he reluctantly conceded in cross examination that he had
received emails of complaints from other owners on various issues such
as building defects, sewer gas smell, etc.) I find that it is more likely than
not that he and his wife refused to participate in that meeting. However,
even if there was accidental omission to give him notice, the section
provides that this failure would not invalidate the proceedings at that
meeting.
![Page 23: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/23.jpg)
- 23 -
I also agree with Mr. Musa, SC, that the contract between
Jack Embry/Grantwell Ltd. and Michael Slusser/Perla Escondida does not
and cannot bind other proprietors under the doctrine of privity of
contract. That is trite law.
I do not agree with Ms. Pitts’ submission that unanimity was necessary
to change the management of the strata plan. Under the First Schedule
to the Strata Act, which is the only binding by-laws, Section 16 clearly
sets out the situations where unanimous resolutions are required and
those are for easements or restrictive covenants.
Looking at the Minutes of the Meeting of the proprietors dated
November 12th, 2005 as exhibited to the witness statement of Sandra
Bergquist, I find that there was quorum of voters as required by Section
10.
“10. Save as is in these by-laws otherwise provided, no business
shall be transacted at any general meeting unless a quorum of
persons entitled to vote is present at the time when the meeting
proceeds to business. One half of the persons entitled to vote
present in person or by proxy shall constitute a quorum.”
![Page 24: IN THE SUPREME COURT OF BELZE, A. D. 2012 CLAIM NO. 531 (SANDRA …belizejudiciary.org/wp-content/uploads/2014/01/Supreme... · 2017. 7. 25. · Mrs. Sandra Bergquist testified in](https://reader036.vdocuments.mx/reader036/viewer/2022071111/5fe668a304ce4b505825016e/html5/thumbnails/24.jpg)
- 24 -
The Minutes reflect that there were 22 owners of condominiums at that
time and 17 voted (personally or by proxy). I find that the resolutions
passed at that meeting were valid and in keeping with the requirements
of the by-laws in the First Schedule and Second Schedule of the Strata
Titles Registration Act Chapter 196 of the Laws of Belize.
I therefore find in favor of the Claimants on this claim in the total sum of
$143,025 (including Legal Practitioner’s fixed costs of $3,000) plus
interest from the due date at 12% per annum. The Defendant’s
counterclaim is struck out.
Dated this 22nd day of December, 2014
__________________ Michelle Arana Supreme Court Judge